Consumer group warns senior citizens of red flags when planning for retirement

By Amberlee Lovell , Deseret News

Published: Friday, April 19 2013 1:55 p.m. MDT

Retiree Robert Rivers poses at his home in Ravena, N.Y., in this 2011 photo. Baby boomers are starting to retire, but many are agonizing about their finances. The Consumer Financial Protection Bureau has suggested ways seniors can be cautious about potentially fraudulent financial advice. (Mike Groll, Associated Press)

Various types of fraud or abusive practices are common when targeting senior citizens, whether it’s a free meal seminar with high-pressure sales pitches for products or other bad retirement advice.

Though all consumers have to carefully distinguish among deceptive financial practices, senior citizens need to be especially vigilant.

Investments that have overly consistent returns offered with seemingly little risk, complicated strategies with lots of jargon, pushy salespeople or guarantees are all red flags seniors can watch for when considering retirement pitches, according to NerdWallet. Investments can’t be guaranteed because they have risks.

For lawmakers, the CFPB also gave seven points to consider when passing protection laws for seniors.

The CFPB wants regulatory action that would:

Include tools to show transparency so credentials and policies are easily seen.

Create a mechanism to capture complaints against senior designation holders.

Increase disclosure requirements that financial professionals have to follow.

Require minimum standards, including coursework and testing, that those who want to acquire senior designations have to meet. These would improve the quality and consistency of professionals.

Require minimum standards of conduct for those who hold senior designations.

Increase supervision in order to penalize professionals in the case of misconduct.

Provide a way for seniors who have been affected by a professional's conduct to seek relief.